SocialismToday           Socialist Party magazine

Issue 191 September 2015

The Tories vs the earth

The new Tory government’s scorched-earth policy is nowhere clearer, or being applied more literally, than on global warming and the environment. Prime minister David Cameron is using his unexpected election victory, the result of the rottenness of the Labour leaders and an accident of electoral arithmetic, to dismantle green-friendly policies. The barrage of announcements over the past three months will remove much if not most of the small advances in environmental legislation made in the past 25 years.

Perhaps the most cynical move is the change to the Climate Change Levy, which was introduced as a carbon tax to discourage the use of polluting energy sources. Now the levy will be applied to renewable energy. As Friends of the Earth (FoE) commented, this is like putting an alcohol tax on apple juice.

The programme to make homes carbon neutral has been axed, with the announcement to scrap the Green Deal Finance Company, set up to provide the loans for this initiative. At the same time, the regulation has been dropped to make all homes zero-carbon from next year. The Green Deal Home Improvement Fund, which gave cash to households for home insulation, has also been terminated. In 2013, the Cameron government called the Green Deal ‘transformational’, and the biggest home improvement programme since the second world war.

Other measures announced since the election are the ending of onshore windfarm subsidies and curbs on financial support for solar power. The new climate change minister, Amber Rudd, has started a review of all remaining renewable subsidies, even though they are already relatively tiny.

In his July budget, chancellor George Osborne announced that hybrid cars, which are far more fuel efficient than other vehicles, will in future be subject to the same tax as gas guzzlers. Osborne also spelled out that he still sees promoting fracking to produce oil and gas as a main policy objective. This would result in even more of the greenhouse gasses that cause global warming.

Rudd has said that fracking will now be permitted on previously protected wildlife sites, as will drilling through aquifers to exploit the gas in shale rock. The latter point ignores a major health and safety concern connected with fracking: the pollution of the water table by the chemicals used in the operation. Fracking typically involves drilling vertically down a mile and then drilling horizontally for up to one-and-a-half miles. So as not to ‘constrain the industry’, a new law will mean that firms will be able to drill down on the edge of a previously protected area and then drill horizontally underneath it. This could be done all round the perimeter of the area, turning regions of natural beauty and wildlife reserves into industrial zones.

Just to emphasise her commitment to fracking, the climate change minister has appointed Paul Maynard as special adviser. Maynard, the MP for Blackpool and Cleverleys, is a strong supporter of the industry and comes from a key area targeted by the oil companies for exploitation. His constituency party received a £5,000 donation from the Addison Group – and was the only one in Lancashire to do so – which hopes to benefit from fracking, according to the firm’s managing director (EnergyDesk website). Maynard says that the donation had no connection with the development of shale gas.

Rudd has lectured environmentalists that green technologies must in future stand on their own feet and compete in a free market. This comment conveniently ignores the huge subsidies that the nuclear industry receives. Forty percent of the budget of Rudd’s Department for Energy and Climate Change goes on subsidies to this sector. The deal that Osborne is trying to cut with Chinese and French nuclear operators to get them to build a new nuclear reactor at Hinckley Point in Somerset has massive non-market incentives included.

These firms are being offered 35-year contracts and will be able to sell their power at twice the wholesale market price. There are also hidden subsides to the oil and gas sector through tax breaks worth £3 billion, and through the operation of the so-called capacity market which is designed to keep old fossil fuel power plants in operation, whose hidden funding is £1.3 billion, according to FoE.

Rudd says that the only solution to fixing climate change is to "use free enterprise and competition to drive down the costs of climate action, to develop new technologies". (Daily Telegraph, 27 July) Leaving aside the hypocrisy on subsidies, her reliance on the ‘free market’ to promote new cheap green technology flies in the face of reality. The cost of solar energy has been significantly reduced in recent years, but this was a result of huge subsidies, open and hidden, by the Chinese government to its manufacturers, in an attempt to dominate the world market in solar production. This resulted in a market glut and collapse in prices for solar cells. Combined with a record high price for oil and with the limited subsidies for solar still in place in the west before austerity took complete hold, there was a small but significant uptake in the use of renewables.

Now, subsidies are rapidly declining and the oil price has fallen by half, and could remain low for an extended period after the US/Iran nuclear deal, which will result in the gradual lifting of sanctions on Iranian oil sales. As a consequence, the take-up of solar technology is falling quickly. At no time has the ‘free market’ produced a green innovation able to compete with existing polluting technologies on cost. This is not surprising because, in the final analysis, profit drives innovation in a capitalist economy, and oil and gas exploitation is more profitable than renewables.

Some environmentalists and green NGOs claim that, if hidden subsidies for nuclear and fossil fuel production were removed, renewables would be able to compete on the resulting ‘level playing field’. This may be true in theory for nuclear energy, if the costs to future generations of decommissioning plant and cleaning up the toxic waste were to be included, but misses the point that capitalism is not interested in future generations. As far as fossil fuels are concerned, it will be cheaper for the foreseeable future for the capitalists to pump oil out of the ground than develop renewables, although fracking may not expand as it is not currently profitable due to the low price of oil.

The lesson is clear: as long as the profit system rules, there is very little chance of a new green technology emerging or for renewables being adopted on the scale necessary to tackle global warming. The Cameron government is sticking two fingers up to the environmental movement in the run-up to the UN climate summit in Paris in December. Osborne has said that the UK will not make any bigger concessions than any other country. This goes to the heart of the matter, because all the key polluting states represented in Paris will do likewise. The gridlock caused by the rivalry of the imperialist powers will continue.

There could, though, be a new political mood developing, highlighted by the Corbyn election campaign, where a socialist approach to tackling global warming will find a bigger audience. Such a socialist approach is the only way to avoid the environmental abyss we are now on the edge of.

Pete Dickenson

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